Mr. Chairman, thank you for the opportunity to present views here today. I appear on behalf of Vietnam Veterans of America (VVA), where I serve on the National staff as Executive Director for Policy & Government Affairs.
Thank you for the opportunity to appear here today to share our concerns and thoughts regarding concerns as to how the Veterans Benefits Administration (VBA) is managing the Fiduciary program. Even more importantly, thank you for holding this hearing, which has spurred VBA to actually take remedial steps they pledged to take six years ago and two years ago. This program is designed to protect some of our most vulnerable veterans. Unfortunately it appears that the program as currently operated falls far short of accomplishing that goal.
Perhaps it would be useful to note that it is our belief that VBA is often too quick to place veterans into the fiduciary program. A more extensive use of automatic bill payments on recurrent bills, and classes in simple financial literacy could eliminate the need for many veterans to be placed in this program. There are now computer applications at the U.S. Department of Veterans Affairs (VA) for everything from
“e-Benefits” to “MyHealth-e-Vet” to PTSD advisor that veterans can download from VA. The point is that there are practical steps that can be taken to assist the veteran to live independently short of placing more veterans into the fiduciary program.
There also needs to be more objective criteria for taking the rather dramatic step of “infantilizing” veterans by putting them into the fiduciary program. There must be clear standard ways for veterans to get out of this program once placed into it.
The preference in choosing a fiduciary for a veteran for whom this is the only alternative should be someone who can be bonded, who has close personal relationship with the veteran, and who lives in the same general geographic area as the veteran, knows the validity of businesses in that area, and can automate as many of the veterans standard recurrent expenses as possible.
Much of the basis of our comments today are based on the Inspector General’s (IG) Report 09-1999-120, dated March 31, 2010, and on the General Accountability Office Report GAO-10-241, dated February of 2010, as well as anecdotal evidence gleaned from our local leaders and service representatives around the nation. There has also been verbal briefings from staff at the Veterans Benefits Administration (VBA) that indicate they know they have a problem, and that they have reassigned as many as 80 staff from adjudication to work on doing quality assurance for the fiduciary program.
As we have noted before this committee in the past, there is no clear indication, to our knowledge, of a coherent plan for getting a handle on the parameters of this problem. VA simply does not know who is responsible for each veteran involved. Many of these veterans have major impairments because of schizophrenia or other condition that means that they are unable to properly care for themselves to the point that someone else needs to take charge of their financial affairs for their protection and well being. Seen from this perspective, they are the protectors of these veterans. Yet VA apparently does not know exactly who is responsible for each and every veteran, and only recently has started to move to at least systematically investigate what is actually occurring at each station. In the recent past it was clear to all that they were not doing even a reasonable minimal job of monitoring to ensure that each and every veteran is properly cared for in regard to their safety and general well being.
The first step is getting a handle on who is the fiduciary for each and every veteran involved in the program. We gather that the apparent allocation of additional staff is intended to accomplish this assessment.What about just hiring a certain number of FTEs in VA or Treasury to be fiduciaries, and not take more than a nominal fee from the veteran’s check such as $8 (the amount of one VHA co-pay)? This would stretch the veterans’ resources much further than usual.
In any case, what should be expressly forbidden is paying fiduciaries a lump sum taken from retroactive disability payments, as is the case today.
It would appear that there are still not clear guidelines on who should be a fiduciary, i.e., meaningful minimum standards and determination of eligibility for same. It is clear that such standards and certification are needed, hopefully without creating a needlessly bureaucratic mass of red tape. It also appears that there is a need for training and quality assurance mechanisms that would be appropriate for all staff assigned to do fiduciary work, but particularly the new staff. In any there should never be a case of one person (often an attorney) serving as fiduciary for dozens of veterans (or even more) where the veteran is seen not as a human being to be cared for, but rather seen as a profit center.
What is perhaps most distressing about the IG reports referenced above was the lack of follow through. There was no implementation of many of the recommendations in the IG Report from 2006 as pledged by the Veterans Benefits Administration (VBA) in their Agency response to that 2006 report. Some (but not all) of those recommendations from both 2006 and from 2010 are just being implemented now as a run-up to this hearing. This has been a major problem at the VA and at the VA IG historically, in that there has been a failure by the IG to follow through to ensure that the pledged corrective action has been taken. As importantly, when the officials in the part of the agency under review pledge to take action, they should be held to this pledge.
Because the majority of the more than 100,000 veterans who have fiduciary agents are in poor mental and/or physiological health, there should be regular communication between Veterans Health Administration (VHA) personnel and whoever is acting as fiduciary agent/guardian. Unless we missed it, monitoring of health condition does not even appear to be on the radar screen as one of the key factors in any evaluation of this program. Is the living situation for the veteran appropriate or not, given his/her disabilities? Is he/she getting to regular appointments at VHA? Does the veteran have adequate shelter, adequate nutrition, assistance to ensure proper hygiene and clothing appropriate to the season, access to needed transportation, and overall well being of the veteran? These are literally life and death questions to which the answer is often not known by those who should be on top of tracking those in need of a fiduciary.
The aggregate amount of monthly income is very significant for the veterans in this program. The size of the aggregate estate of these veterans combined is at least several billion dollars. Any time there is that kind of money there had better be strong accountability mechanisms to ensure that it is being used for the intended purpose(S).
To not have clear guidelines and consistent monitoring only invites misuse and misappropriation of these funds. There appears to be so little in the way of effective tracking and oversight of this program that VA does not have any idea if the funds are being used correctly. This is akin to shipping $10 Billion in cash into the war zone in Iraq and then acting surprised that they could only account for less than a third of the money. It is just not a prudent or wise thing to do.
VVA hears anecdotal stories about attorneys or others who are acting as agents/guardians for many veterans whom they have never met except over the telephone. It seems pretty clear to us that there is no relationship to speak of in positive way between the veteran and the fiduciary. As noted above, it appears they see a “profit center” and not a human being who served their country well who is now in dire need. It seems pretty clear to us that these people are getting more than the 4% of funds being handled in the name of the veteran. In fact the record keeping at the VBA does not appear to even be to the level where this can even be monitored or detected. Looked at from both a fiscal point of view as well as a human point of view, this must change.
In short, there must be a cap placed on the number of veterans a fiduciary may represent, and much closer monitoring of where the money is going. Additionally, VVA suggests an overall cap on total fees going to each fiduciary, and that fees should not be based on percentage of a veteran’s benefits but rather on work done.
There is still a need for VBA to make a significant effort to put such a system in place as quickly as possible. To not move boldly and quickly would be irresponsible, and leave many of our most vulnerable veterans subject to abuse and theft of resources that is rightfully theirs.
While it may not be practical to just “start over’ it is clear that dramatic change is called for in this area. There is finally at least some progress toward straightening out the C&P system because VA has admitted that they have a problem, and is now recognizing that the VBA must treat the Veterans Service Organizations (VSO) as well as state and local partners as true equal partners in this process of reform. We suggest that the same holds true for the fiduciary program at VA.
The welfare of the individual veterans who are least able to fend for him/her self should be enough to drive immediate reform. Added to that primary responsibility is the need to properly account for taxpayer dollars, and the VA and Congressional responsibility to ensure those funds are being used correctly for the welfare of the intended recipients.
Thank you for this opportunity to present our views here today. I will be happy to answer any questions.